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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (5679)	1/21/2004 1:40:28 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 110194

Asian import price inflation will start with Japanese products not Chinese you focus too much on China, whose currency is pegged fixed I hear numerous stories now of Japanese hikes in price, after hit by exchange rate the JYEN is up 10% since Oct 1st a certain impact is due the first round will see their suppliers absorbing half the initial hit the second round will see their suppliers all passing along the hikes it has begun our trade deficit with Japan is 80% that of China so this is not a trivial factor an overlooked factor is widespread Taiwanese, Korean, and Singapore hedgebooks based on the only major Asian currency on FOREX, the JYEN these exporters are not rookies, and certainly protect themselves by hedging on currency risk the JYEN is the only device available I expect to see all of Asian (ex-Chinese) currencies rise together here and cause import prices to nudge north again, I tend to agree with your TBond points but you minimize the threat of incipient and imported inflation roiling the bonds for sure, we will see flight to safety in TBonds but I expect bond vigilantes to reappear on the horizon I believe the leveraged yield carry trade game is 90% done we might regard the next push in TNX down to 3.5-3.6% as a retest of June lows and signal the start of bond erosion, corrosion, contusion, confusion, diffusion, in unison we here are certainly surrounding this issue you on the safe haven side me on the nascent inflation side / jim